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Thin Slicing

By Steve Sullivan

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Anybody who's ever watched an episode of the TV series "House" knows that the eponymous Dr. Gregory House is a medical malpractice lawsuit waiting to happen, an insurance carrier's worst nightmare. He's rude, crude, nasty, arrogant, condescending, belligerent, sarcastic, and often downright mean.

He also happens to be a brilliant diagnostician, and he's always right. Implicit in the show is that his infallibility is the only thing keeping him out of court. You may not be able to stand the guy, but what are a few rough edges if he saves your life?

But how infallible would he be without a scriptwriter? In the real world, a fallible Dr. House would be dead meat. And even if his three young, attractive, and compassionate assistants were more culpable, they would most probably be off the hook, leaving House to face the music. Why?

Over the years, the pages of Contingencies have contained articles about how difficult it is for actuaries to price medical malpractice insurance for health practitioners in general, let alone for practitioners like Dr. House.

Just last issue, an article ("A Hard Look at Soft Fraud") looked at a tool actuaries use called data mining, a process that requires lots and lots of data. And from that data emerge patterns, and from those patterns emerge trends, and from the trends emerge pricing strategies that may or may not hit the mark. And it all takes an enormous amount of analysis and number crunching, not to mention time.

But according to Blink, Malcolm Gladwell's bestseller about precognitive cognition—how we sometimes know things before we know we know them—there may be another way. And it's almost the direct opposite of data mining. Instead of piling mountains of data cataloging doctors' mistakes and lapses of judgment, insurers could make much better predictions simply by watching and listening for a few minutes to how a doctor works with patients.

Doctors make mistakes. No argument there. And some doctors make more mistakes than others. But according to Gladwell, those aren't necessarily the doctors who get sued the most. The doctors who get sued the most not only make mistakes; they also make their patients feel like—well, you name it: cattle, idiots, morons, ciphers, peons, anything less than human.

Is there a Dr. House in the house?

Doctors who get sued talk down to patients. They're imperious, distant, condescending, dismissive. Doctors who don't get sued are warm, funny, caring. They listen to their patients. Gladwell quotes a prominent malpractice lawyer who says: "People just don't sue doctors they like."

As with all the assertions he makes in his book, Gladwell backs this one up with scientific studies and experiments. In one, researchers taped conversations between doctors and their patients. The conversations were reduced to 10 seconds each, and from each slice the content was filtered out to leave only the tone of voice. Rating for qualities such as warmth or its absence, the researchers were able to accurately determine which were the doctors who got sued and which weren't.

"Malpractice sounds like one of those infinitely complicated and multidimensional problems," Gladwell writes. "But in the end it comes down to a matter of respect, and the simplest way that respect is communicated is through tone of voice."

The process is called thin-slicing, "the ability of our unconscious to find patterns in situations and behavior based on very narrow slices of experience." All it takes is a few minutes of listening. It doesn't take an expert, and it doesn't take truckloads of data. A trained insurance evaluator could probably spend a few minutes observing a doctor and emerge with a fairly accurate rating. And a fair premium.

Radical? Sure sounds it. Practical? Who knows? But if the medical malpractice crisis gets any worse, couldn't hurt to try it.

 


Contingencies (ISSN 1048-9851) is published by the American Academy of Actuaries, 1100 17th St. NW, 7th floor, Washington, DC 20036. The basic annual subscription rate is included in Academy dues. The nonmember rate is $24. Periodicals postage paid at Washington, DC, and at additional mailing offices. BPA circulation audited.

This article may not be reproduced in whole or in part without written permission of the publisher. Opinions expressed in signed articles are those of the author and do not necessarily reflect official policy of the American Academy of Actuaries.

May/June 2006

Retirement Income Security Programs Longevity as an Insurable Event

One Hundred Billion Gazillion Dollars

No Easy Answers: Is There a Future for Individual Health Insurance?

Special Section: Recruitment

Inside Track:
Thin Slicing

Letters

Commentary:
The Funding Crisis in Municipal Pensions

Up To Code:
ABCD Advice for New Actuaries

Policy Briefing:
The Ancients and the Actuaries It's All Greek to Me

Workshop:
Reinsurance Pricing

Tradecraft:
Where Are the Good Candidates?

Puzzles:
Fight with the Dragon

Endpaper:
Living Like a King


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